If I have more than 3,000 capital loss carry over from the previous year, plus I have few more thousands this year, how much can I use against the capital gain ordinary income?
Hi Godzilla,
You can use the capital loss carryover up to the amount of capital gain you have in the current year, plus an additional $3,000 loss.
For example, let's say you have $45,000 of capital gain loss carryover from prior years. In 2024 you have $35,000 capital gains. You can use $35,000 of the carryover loss, plus another $3,000, and have $7,000 to carry over to 2025. The loss completely wipes out the $35,000 capital gain for 2024.
Thank you - and where is that option invoked as you navigate FreeTaxUSA? 1st look this year and it didn't readily come up for me.
That can be done by going to Income > Common Income > Capital Loss Carryovers from Last Year. You will be prompted there to enter any short-term and long-term capital loss carryover from last year.
You'll want to use the Capital Loss Carryover Worksheet to calculate your capital loss carryovers from 2023 to 2024.
